Geopolitical risk has moved to the top of the agenda for UK chief financial officers, according to Deloitte’s latest CFO Survey for the first quarter of 2026. The survey shows that business optimism among CFOs at major UK companies has fallen to its lowest level in six years, reflecting growing concern over external uncertainty, the Middle East conflict, inflation, energy prices, and financing costs.

Geopolitical risk has become the leading concern for UK finance leaders

Deloitte’s quarterly CFO Survey has tracked sentiment and balance-sheet strategies among the UK’s largest businesses since 2007. The Q1 2026 edition points to a more cautious corporate environment, with finance leaders prioritizing resilience over expansion. According to Deloitte, geopolitical risk is now cited as the top external risk by UK CFOs, with concern reaching a record high.

The findings show how international instability is shaping business decision-making. Deloitte said the conflict in the Middle East has shaken CFO confidence, pushing optimism to levels not seen since the early stages of the COVID-19 pandemic. This suggests that geopolitical risk is no longer being treated as a distant macroeconomic issue, but as a direct business concern affecting costs, investment, margins, and planning.

For companies involved in retail, consumer goods, logistics, technology, and cross-border trade, the implications are significant. Geopolitical risk can affect business through multiple channels, including energy prices, shipping routes, supplier reliability, insurance costs, and currency volatility. Even when companies are not directly exposed to conflict zones, the wider economic impact can influence operational costs and consumer demand.

Deloitte’s survey also shows that concerns over inflation and interest rate rises have increased sharply. This is important because higher inflation can raise input costs, while higher financing costs can limit investment appetite. For CFOs, this creates a difficult balance: companies need to protect margins and cash flow while still investing in digital transformation, supply chain resilience, and long-term competitiveness.

Cost control and building up cash are now at the top of the priority list for finance leaders. This indicates a shift toward defensive corporate strategies. Rather than focusing mainly on aggressive growth, many CFOs appear to be preparing for a period of continued uncertainty. In practice, this may mean tighter budgeting, closer review of capital expenditure, delayed hiring plans, and stronger attention to working capital.

The focus on cash conservation also reflects the pressure created by geopolitical risk and tighter financial conditions. When external shocks become more difficult to predict, companies tend to value liquidity. Cash reserves provide flexibility if demand weakens, borrowing becomes more expensive, or supply chains face disruption.

For the retail and e-commerce sectors, the survey’s findings are especially relevant. Retailers are exposed to consumer confidence, logistics costs, import prices, and discretionary spending patterns. If geopolitical risk continues to push energy prices higher or disrupt trade routes, retailers may face higher operating costs. At the same time, consumers under inflationary pressure may reduce spending on non-essential categories.

However, a more cautious CFO environment does not necessarily mean that companies will stop investing. Instead, investment priorities may become more selective. Businesses are likely to favor projects that improve efficiency, reduce costs, strengthen supply chains, or produce measurable returns. In retail and e-commerce, this could support investment in automation, demand forecasting, inventory optimization, payments, and customer data systems.

Deloitte’s findings also suggest that corporate leaders are adapting to a world in which uncertainty has become a normal part of decision-making. Geopolitical risk, inflation, and financing costs are now closely connected in corporate planning. CFOs are not only assessing revenue growth, but also the resilience of their operating models.

The survey points to a business climate in which finance leaders are more cautious, but not necessarily inactive. The key difference is strategic discipline. Companies may continue to pursue growth, but with greater scrutiny over costs, capital allocation, and risk exposure.

Overall, Deloitte’s Q1 2026 CFO Survey shows that geopolitical risk is reshaping the corporate outlook in the UK. With optimism at a six-year low and external concerns at record levels, finance leaders are focusing on balance-sheet strength, cost control, and cash preservation. For global businesses, the message is clear: growth strategies in 2026 will need to be built around resilience as much as expansion.